Coming off yesterday’s moderate pullback, which saw US indices decline 0.3%-0.5%, US index futures are trading flat to up 0.2%. Overseas, the Hang Seng lost 1.3%, the Nikkei was quiet, the FTSE has lost 0.3% and the Dax is up 0.1%. Commodities have erased earlier losses with Crude Oil now flat and Copper now down only 0.1%. In currency action, Gold is steady while the Euro is down 0.5% and the Loonie is down 0.2% against the greenback.
It’s a huge day for potential market news across a number of fronts. This morning, the first read of US Q2 GDP (3.0% vs s\Street 2.4% and previous -0.5%), crushed expectations and indicates that the US has, for now, managed to avoid a technical recession of two negative quarters in a row. The GDP price index also came in better than expected (2.0% vs Street 2.4% and previous 3.8%), indicating that inflation remains subdued.
During the day, both the Bank of Canada (9:45 am EDT) and the Federal Reserve Board (2:00 pm EDT) are expected to announce monetary policy decisions. With the US set to implement tariffs starting on Friday, both central banks are expected to keep their benchmark interest rates on hold at 2.75% and 4.50% respectively this time. Investors may look for commentary related to the potential impact of tariffs on the North American economy and current business decisions.
After market close, several major technology companies are scheduled to report earnings including Microsoft, Meta Platforms, Qualcomm, Arm Holdings, and Lam Research. In Canada, results are due from Canadian Pacific, Agnico-Eagle Mines*, and Kinross Gold*. Several stocks staged significant selloffs after reporting earnings yesterday including Novo Nordisk falling 21.8%, UPS dropping 10.5%, and Spotify losing 11.5% as investors continue to take profits against earnings reports.
The market reaction to overnight earnings has been relatively subdued as investors await this afternoon’s big events. In premarket trading, Starbucks is up 5.3%, Booking Holdings* is down 1.3%, and Visa is down 2.4%.
*Shares of Booking Holdings, Agnico-Eagle Mines and Kinros Gold are held in some portfolios managed by SIA Wealth Management.